Real estate: Israelis discover Michigan

Israeli real estate
developer and co-owner of SB Capital, Shlomi Baranovski, is partnering with senior associates at Afik-Turgeman law firm, attorneys Shlomi Turgeman and Doron Afik, to found a residential real estate investment fund for private investments in the US.

Calcalist learned that the new fund, named Afik-Turgeman Investments, has already raised $10 million in seed capital,
which it will invest in residential real estate. The fund is planning to hold additional financing rounds for Israeli investors.

In addition to raising seed funding from private investors, the fund is holding talks to raise more funds from institutional investors in Israel. Last week, the fund's managers said that they intend on concentrating its activity in the Michigan
area and that their policy is to bring in a large number of investors at a relatively low investment threshold for this type of fund – NIS 100,000 (roughly $28,000) – and that the most investors will be allowed to invest in the fund is NIS 3 million (roughly $800,000.)

The managers say that the fund aims at investors who are seeking mid-term financial investments for 3-5 years. Turgeman, who is the fund's chairman, said that the fund intends to spread risks by investing in a large number of assets. The fund's managers forecast an annual yield of at least 10%.

In reply to Calcalist's inquiries concerning the high risk levels in the residential real estate market in the US, Baranovski said: "We are focusing on Michigan where we have gained experience on the local market and with authorities. We chose the area as the focal point for our investments after examining several markets in the US in recent years.”

"These are properties with a 98% occupancy rate. This window of opportunity in the area is about to close,” he said.